between Pennants and Symmetrical Triangle patterns

written by http://www.forexabode.com/forex-school/watch-out-for-patterns/pennants-and-symmetrical-triangle-difference/

At the first glance a pennant pattern looks like a symmetrical triangle chart pattern. In fact you got it. A pennant has a symmetrical triangle. Well, we did not say that a pennant IS a symmetrical triangle

 

 

Both pennants and symmetrical triangles are formed when you have support and resistance lines and they converge together, while slopping in opposite sides to form an approximate symmetrical triangle. However a pennant has something else which a symmetrical triangle doesn't..

 

Let's have a look on some of the pennants and symmetrical triangles on trading charts.

 

 

 

 

 

 

What a Pennant has that a Symmetrical Triangle Doesn't?

 

You must have already noticed the difference but if not then look at the following pictures:

 

 

Yes you got that right! A symmetrical triangle can be considered as only the flag while a pennant is the flag with the pole. The pole here is a large candle on the candle stick chart just before the pennant starts forming. The height of this candle is much bigger than the wide side of the pennant.

 

Considering the above a major difference between two is that in case of a pennant the sentiments about the ongoing trend suddenly becomes very strong before a slight pause. This makes a pennant a more reliable continuation pattern than a symmetrical triangle.

 

Difference in trading the Pennants and Symmetrical Triangles

 

Pennants

 

It's much easier to predict the breakout direction in case of pennant pattern as a pennant is generally a continuation pattern. In case a pennant pattern emerges during an uptrend, the breakout is normally on upside so that the uptrend continues and in case of downtrend a downward breakout takes place.

 

Symmetrical Triangles

 

Though symmetrical triangles are also considered as continuation patterns but practically a breakout can take place on either side and hence it is better to be prepared to take a position either way.